The Changing Economics Of TV RerunsTV studios make big bucks reselling their hit shows to cable networks, but the business model for syndication has been shifting over the last few years as cable networks produce more original programming.

Cable reruns of popular TV series from broadcast networks, like NBC's Law & Order, which starred actor Sam Waterston, have brought in big bucks for TV studios.
Virginia Sherwood/AP/NBC Universal
hide caption

toggle caption

Virginia Sherwood/AP/NBC Universal

Cable reruns of popular TV series from broadcast networks, like NBC's Law & Order, which starred actor Sam Waterston, have brought in big bucks for TV studios.

Virginia Sherwood/AP/NBC Universal

Until recently, Americans have pretty much proven themselves not only willing to watch just about anything on television, but also eager to watch it again and again.

"It's a truism at this point that people can watch eight hours of Law & Order in a row, including episodes that they have already seen," says Emily Nussbaum, the television critic for New York magazine. "They aren't watching it because it's high quality. They are watching it because it's soothing and comforting."

But broadcast TV shows that once would have commanded a premium from basic cable channels as reruns — thus making more millions for the studios that created them — are now being squeezed aside.

Cable channels are building identities on such original shows as USA's Royal Pains and AMC's Mad Men. The reruns they do pick have to go through a rigorous selection service.

"Cable networks have tried to become brands," says former Turner Entertainment Networks president Brad Siegel, who co-founded and runs the Gospel Music Channel. "And in that brand ... they have created certain filters on the kinds of shows that when you put them all together, they sort of define a network."

As cable television networks produce more of their own hit shows, like TNT's The Closer starring Kyra Sedgwick, TV studios face stiffer competition for rerun slots on cable.
Danny Feld/AP/Turner Broadcasting
hide caption

toggle caption

Danny Feld/AP/Turner Broadcasting

As cable television networks produce more of their own hit shows, like TNT's The Closer starring Kyra Sedgwick, TV studios face stiffer competition for rerun slots on cable.

Danny Feld/AP/Turner Broadcasting

Under Siegel's watch, TNT outbid the cable channel A&E for reruns of Law & Order.

So when TBS says it is "very funny," and TNT promises, "We know drama," each rerun that appears has to match the network's image. On TBS, Conan O'Brien's new late-night show will be accompanied by Seinfeld reruns; on TNT, Kyra Sedgwick's The Closer sits cheek by jowl with Cold Case.

"These days there is certainly more cachet in developing original series, and I think ultimately they are seeking more profit for that, too," says Derek Kompare, author of Rerun Nation: How Repeats Invented American Television and an associate professor in the Meadows School of the Arts at Southern Methodist University.

All of this flies in the face of television history, during which lesser channels built nostalgic followings by re-broadcasting shows. Iconic characters loved Lucy, boldly went where no one has gone before and patronized the bar where everyone knows their name.

"Reruns act like little time capsules," New York magazine's Nussbaum says.

Rules Of Syndication

According to former cable network executive Siegel, there used to be just one iron-clad rule: "Great comedy works."

New Shows to Watch This Fall

A secondary, more flexible rule, Siegel says, required shows to have at least 66 episodes under their belt. That magic number produced a bigger profit when broadcast networks auctioned off their shows because it allows a cable channel to do what the industry calls "stripping": running a show every weekday in the same time period for three straight months without duplication.

Series that were police procedurals, in which crimes are solved by the end of an hour, did better than complicated serial dramas where characters develop over the course of a season.

Now the rules are being scrambled. CBS got roughly $2 million per episode from TNT for the rights to rebroadcast its hit show The Mentalist. But HBO sold The Sopranos to basic cable channel A&E for at least as much, and it has also sold the rights for other series, including Sex and the City, The Wire and Entourage.

That means even as there are fewer slots in which reruns can be shown, the old-school broadcast networks are facing tougher competition in trying to get big money to fill them.